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Global newsprint prices increase again
19/01/2009
Countries including India and the US have measured a significant increase in the price of newsprint in recent months, hitting newspaper profits hard, but bringing welcome relief to sectors of the forestry industry.
Demand for newsprint has dropped off somewhat in the United States, as demand for timber from the building and construction industry has been hit by the effects of the credit crunch. However, prices have recently increased as a result of falling supplies, which may take some of the strain off the forestry industry.
Asia is a growth area for newsprint and domestic supply is struggling to keep up with demand in the continent. As a result India has reported newsprint prices increasing 30% to 35% over the last quarter of 2008, with newspapers announcing corresponding revenue falls.
Newspapers in the US have also reported high newsprint prices (a rise of 30% in the year to September 2008) and some have reduced the amount used in an attempt to try to cut costs. It seems that globally, the demand for newsprint remains strong and prices reflect this trend, despite US demand waning in response to the economic downturn and the drop in newspaper readership.
Producers of newsprint in Europe, including Norske Skog, the second biggest global producer, are currently in negotiations with customers with the stated intention of lifting prices by a further 20%. They are using the argument that there is less capacity (estimated at 6%) and less competition. But industry experts are saying that a 20% increase on top of last year's rises could be pushing the industry a little too far.
Demand for newsprint has dropped off somewhat in the United States, as demand for timber from the building and construction industry has been hit by the effects of the credit crunch. However, prices have recently increased as a result of falling supplies, which may take some of the strain off the forestry industry.
Asia is a growth area for newsprint and domestic supply is struggling to keep up with demand in the continent. As a result India has reported newsprint prices increasing 30% to 35% over the last quarter of 2008, with newspapers announcing corresponding revenue falls.
Newspapers in the US have also reported high newsprint prices (a rise of 30% in the year to September 2008) and some have reduced the amount used in an attempt to try to cut costs. It seems that globally, the demand for newsprint remains strong and prices reflect this trend, despite US demand waning in response to the economic downturn and the drop in newspaper readership.
Producers of newsprint in Europe, including Norske Skog, the second biggest global producer, are currently in negotiations with customers with the stated intention of lifting prices by a further 20%. They are using the argument that there is less capacity (estimated at 6%) and less competition. But industry experts are saying that a 20% increase on top of last year's rises could be pushing the industry a little too far.
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